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Photos by Chris Crook

Lavy on county debt: Commissioner Jerry Lavy talks about the need to take on debt to get water, sewer projects done.

NORTHPOINTE ROAD: The county took out two loans for construction of a road designed to alleviate traffic backups and crashes on Ohio 60 between Zanesville and Dresden. The county still owes $5.6 million on an $11 million loan, to be paid off in 2020. A $4 million State Infrastructure Bank loan was paid off early in 2011.

ROADS

Includes bond debt for improvements to roads in the EastPointe Business Park,

Brandywine Loop Extension and

Northpointe Road.

WATER

Includes bond issues and loans for 12 waterline improvements and the acceptance of

$8 million in debt from the defunct East Muskingum Water Authority.

BUILDINGS

Includes debt for the purchase, construction or renovation of six county-owned buildings and a loan for the County Fair Board.

SEWER

Includes debt for 17 sewer-related bond

issues and loans, including 13 specific

sewer projects.

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ZANESVILLE — Muskingum County’s current debt is about $50 million, or about $580 for every resident in the county.

Unlike the current $17 trillion national debt, which the federal government is having a hard time debt servicing without printing money, local government officials make sure they don’t bite off more than they can chew.

In other words, a dedicated revenue stream is in place to make the loan or bond payments, whether through existing taxes or payment of water and sewer bills.

“We have to have the revenue stream there, whether its block grants, property tax revenue in the case of general fund projects, special assessments to retire the debt, or water and sewer revenues,” County Auditor Debra Nye said. “When it comes to the water and sewer funds, the (Ohio Water Development Authority) has helped out tremendously with those as far making loans available.”

The majority of the debt has been taken on in the past 10 years to construct projects such as Northpointe Road ($15 million), the West Pike Sewer ($6 million), and waterline extensions to Gaysport ($1.2 million) and Chandlersville ($1 million).

The former East Muskingum Water Authority system was dissolved, and the county took on about $8 million in debt and another $8 million for its share of the Zanesville Wastewater Treatment Plant upgrades.

The sewer projects have enabled hundreds of homes to tap into Zanesville’s central sewer system in an effort to eliminate private septic systems and eight small treatment plants scattered across the county. Residents who had been served by aging community wells or tanks, susceptible to arsenic and other contaminants — such as in the Gaysport area or those coming online in Mount Sterling and Gratiot — were able to have potable water for the first time in years.

Loans also enabled the county to buy or improve several buildings housing county departments, including the juvenile detention center and child support enforcement building on East Pike, the county records building on Fifth Street, and the old Maysville Junior High School on Pinkerton Road, which houses the Muskingum County Business Incubator.

Looking to make a comparison to see whether the debt is reasonable for a county the size of Muskingum, the Times Recorder made inquiries to Tuscarawas County officials. Tuscarawas is the closest county to Muskingum in population size and the number of property parcels that make up its tax base. However, that county’s debt totals could not be confirmed.

Without the ability to take on long-term debt and refinance from time to time to save on interest rates, the county’s infrastructure would look much different today.

Water and sewer bills would be higher because residents wanting those services would have to pay more. The county courthouse would be bursting at the seams because of a lack of space for some departments.

Traffic safety would be a bigger concern on Ohio 60 North without the addition of Northpointe Road and the Brandywine Loop Extension. Some roads in the EastPointe Business Park might still be waiting for asphalt, which would have hindered economic development efforts and delayed job-creating projects such as the Avon Distribution Center.

“There’s no question it makes a difference,” County Commissioner Jim Porter said. “If we had to do some of these projects on our own, people would be paying a lot more for services or the projects just wouldn’t get done.”

County Projects Director Don Madden agreed.

“We’re trying to make the projects as cost-effective to the taxpayers as possible,” Madden said. “But we wouldn’t be able to do that without loans.”

Going out for some of the water and sewer loans were out of necessity, he said — a necessary evil because the county is at the mercy of Environmental Protection Agency mandates.

“When you have findings and orders, consent orders saying you must do this, you must do that in a given time frame, or you will face fines, it’s the only thing you can do,” Madden said. “Grants don’t cover everything. You still need that loan.”

Some of the long-term debt for infrastructure projects has been paid off recently, which saves taxpayers and the county money, Porter said.

“That’s something we’re proud of and how much it saved us in interest and years of debt service,” Porter said, referring to five loans, totaling $2.6 million, paid off during the past two years.

Those issues include sanitary sewer work in the EastPointe Business Park, improvements to the Maysville building, renovating the Help Me Grow building on Putnam Avenue and part of the Northpointe Road debt.

The county also bought four U.S. Department of Agriculture Rural Development loans and paid them off with sewer revenue, refinanced the debt and took 11 years off the repayment schedule.

That action saved the county $3 million, and the interest revenue from having the sewer fund “pay” the general fund is expected to net $124,000 this year, Nye said.

“We’re getting creative. By loaning the sewer department money at a lower interest rate, they save money on interest, and we use that interest to invest back into the general fund,” Porter said.

Another six debt issues — about $2.7 million — were refinanced in 2012, which will save the county $350,000 during the 20-year term. Those issues included the county records building, Maysville sewer debt first issued in 1989, a loan to the Fair Board, Ash Meadows sewer assessment, Falls Township sewer and the North Sewer Extension.

“We’re looking at all avenues to trim our debt. All we can do is keep trying, applying for everything we can,” Porter said.